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Justice. Only Justice Shall Thou Pursue

Starting Aug. 1, the Federal Housing Administration will extend the period for unemployed homeowners to miss mortgage payments to a full year from three or four months. That will allow qualified homeowners to go without making a monthly payment for 12 months before the foreclosure process begins.

The extended grace period only applies to FHA-backed loans, which are usually given to low- and middle-income borrowers and represent about 14 percent of all active mortgages and roughly 25 percent of new mortgages, and homeowners in the government's foreclosure-prevention program. About 10,000 homeowners in the foreclosure program and 3,500 FHA-backed homeowners per month would be eligible, officials said.

Housing and Urban Development Secretary Shaun Donovan said Thursday that administration officials hope private lenders and government-controlled mortgage giants Fannie Mae and Freddie Mac, which back 90 percent of all new mortgages, will adopt a similar policy.

"Our hope is that this will have broader effects," Donovan said during a conference call.

The government launched its chief foreclosure program in 2009 to help those at risk of foreclosure by lowering their monthly payments. Borrowers start with lower payments on a trial basis. But the program has struggled to convert them into permanent loan modifications.

More than 1.6 million troubled homeowners received trial modifications over the past two years. But a majority of the applicants, about 854,000 homeowners, have dropped out of the program entirely.

In recent weeks, administration officials have acknowledged that housing has become a significant drag on the economy. President Barack Obama said the housing market has "been most stubborn to us trying to solve the problem," during a town-hall-style meeting Wednesday on Twitter.

This latest program will do little to stem the tide of foreclosures because so many properties are underwater and so many people are underemployed or out of work altogether. It will take years for inventory in some parts of the country to reach healthy levels, meaning these programs will have little impact.

Yet, there are a few programs that are worthwhile - and among them is one that actually reward those people who have been making their mortgage payments on time and are current on their obligations.

This past week, I received a FedEx notice from my bank that they want me to refinance my mortgage for free. It's part of a little known program called the Making Home Affordable HARP program, though the bank didn't actually state it was part of that program. I had to dig around to make sure that this wasn't a scam, and I called the bank to confirm that this was a legitimate offer. After all, if it seems too good to be true, it probably is.

The program allows you to refinance your mortgage and take a lower rate along with either reducing your term or extending your mortgage back to a 30 year. After going through the details, I will be getting a mortgage that is 5/8 points lower than my existing rate.

It's for homeowners who are current on mortgage obligations but whose property may have lost some value. The way I see it, I'm getting a mortgage at a rate I should have gotten when I last refinanced.

As it is designed for those homeowners who are current on their mortgages, this frees up additional money to either pay down the mortgage faster or to spend on other purchases or to save the money for a rainy day fund.

That compares with other parts of the MHA program that have been far less successful, especially when it comes to getting homeowners who are at risk of foreclosure to get new terms within their means. The Administration has made multiple attempts to engage in a loan modification program to assist those homeowners who are at risk of foreclosure, but more than half of the people who have entered the program have dropped out or have required still more modifications with little effect.

The market has to work through the inventory and some areas are in much better shape than others because speculation didn't drive up prices and spur a housing boom that quickly went bust along with the credit markets. That's going to take time - and time is one thing that politicians don't want to think about when they're standing for reelection.